Analysts Warn: Precious Metal Prices on the Edge of a Cliff, Accumulating Risk of Pullback

According to sources, as prices of precious metals such as silver continue to surge, analysts are warning that precious metal prices are on the edge of a cliff, with the risk of a pullback accumulating. Analysts at Capital Economics wrote in a report: Precious metal prices have risen to levels that we believe are difficult to explain with fundamentals. They expect that as the frenzy for gold subsides, silver prices could fall to around $42 by the end of next year. UBS warned that the rapid rise in current precious metal prices is largely due to insufficient market liquidity - meaning a quick drop is likely.

UBS emphasized that short-term risks in precious metal trading have significantly increased, especially since gold prices have reached new highs, posing a high risk for short-term investors to take profits. Thin liquidity at the end of the year may exacerbate price volatility, making short-term trends harder to interpret. Wang Yanqing, Chief Analyst of Precious Metals at CITIC Futures, stated that from a fundamental perspective, the short-term impact factors of precious metals and non-ferrous metals have not changed significantly. Although there are long-term bullish factors such as de-dollarization in the market, the recent rapid rise clearly overtraded the long-term bullish factors, with speculative sentiment running high, bringing potential risks to the market's stable operation.

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